Deduct boat purchase from taxes!

[zoom50]

I thought this was interesting...<br /><br />The second-home deduction for interest paid on boat loans is the biggest tax deduction in American recreational boating. It is used on runabouts that have tiny cuddy cabins and multimillion-dollar yachts. Boat manufacturers nowadays have the tax deduction in mind when they install the proper amenities in small boats.<br /><br />The Internal Revenue Service rarely bats an eye at questionable cases, nor does it keep track of the lost revenues.<br /><br />Approximately 500,000 pleasure boats in the United States are large enough to qualify, about 3 percent of all recreational boats in the country, according to Jim Petru, research director at the National Marine Manufacturers Association.<br /><br />Only about 100,000 people actually live full time on boats, recreational vehicles and vans, according to the 2000 Census.<br /><br />Living on a boat isn't required, though. All that's needed is a sleeping platform, toilet and cooking facilities, and some indication that the owner stays overnight on the boat at least 14 days a year, according to Internal Revenue Service regulations<br /><br />Hmm...I am thinking of upgrading to a cuddy!

 

[jtexas]

Re: Deduct boat purchase from taxes!

Sleeping platform: got one, only I call it "floor."<br />Toilet: I'm a man; the world is my toilet.<br />Cooking facilities: how bout a propane camp stove.<br /><br />Now all I need is interest expense, which I ain't got cause it's paid for.

 

[JB]

Re: Deduct boat purchase from taxes!

The "second home" deduction is pretty thin. I don't know enough about it.<br /><br />Many years ago in Ft. Lauderdale, I got myself a salt water commercial fishing license ($25), a "sixpak" Captain's license and a brand new Boston Whaler 18 Outrage.<br /><br />I took out charter fishermen about once a month, sold "surplus" mahi mahis and tuna to the fish market (or traded them for lobsters and shrimp) about twice a week and wrote off 50% of the boat price in three years. $12,000 in tax deductions was a lot in 1983-4. It also put me a couple of tax brackets lower than otherwise. Finally, I wrote off the interest on the boat loan and half of the fuel and maintenance, about a grand per year, for 5 years. Bottom line? That $24,000 boat ended up costing me about $15,000 and my fuel and maintenance was about 25% less.<br /><br />Make your boat a capital asset of your "business" and you can deduct a lot of stuff without bending the truth.

 

[zoom50]

Re: Deduct boat purchase from taxes!

JB,<br /><br />You are a smart man!...Some call me the cheapest guy alive, but I like to find good opportunities...Boating is one area where I know I am dumping a ton of money into a pit, but it is worth every penny. I am a thrify man and always looking out for the best bang for my buck. Now if I can convince the wife to let me start a fishing charter...thats another forum...divorce.com

 

[RatFish]

Re: Deduct boat purchase from taxes!

I bought a boat in 2004. My accountant (brother in-law) asked me the amount I paid in state sales tax. He said the sales tax could be deducted because I itemize deductions on my state and federal income tax returns. I'm not sure if that applies to both state and federal tax returns. I'll have to follow up.

 

[TwoBallScrewBall]

Re: Deduct boat purchase from taxes!

That was the main reason I picked the used 23 footer over the new 20 footer this year. The 23 footer has an alcohol stove, vecuflush head and sleeps 2 easily (oh and was about 2/3 the price while being bigger and in as good as new shape). Now I can write off that interest like mortgage interest, really helped out this year and will continue doing so for the next 10.

 

[jtexas]

Re: Deduct boat purchase from taxes!

Originally posted by JB:<br /> The "second home" deduction is pretty thin. I don't know enough about it.<br />

It's pretty cut and dried. IRS made specific rules about it so they wouldn't have to to to court over it all the time. Home mortgage interest is deductible, for one or two homes. It's a home if you spend 14 nights there during the year. Motor homes & travel trailers are homes and so are boats if they have accomodations for sleeping, eating & going to the bathroom.<br /><br />Claiming a boat as a business expense can be more of a gray area, not so much the situation you described - that was clearly a business, but for somebody just looking to generate some deductions.<br /><br />Sales tax deduction: starting in 2004 you can deduct the greater of state & local sales taxes paid or state & local income taxes paid. You can either keep track specifically of how much sales tax you pay, or you can use the IRS tables for figuring the average amount paid for somebody with your income. Add big ticket items (cars, boats, refrigerators) to the amount from the table.<br /><br />That law was passed because state income taxes have always been deductible creating an inequity for people in non-income-tax states.<br /><br />If you keep track of your spending with software like quicken, you can easily figure your actual sales tax paid, and usually it's more than the tables. Don't forget about credit card purchases, which might be taxable, while the credit card payments are not.

 

[PAkev]

Re: Deduct boat purchase from taxes!

Like JB,<br /><br />I got the blessing of my accountant (CPA) for legitmate boating expenses that also account for a portion of my business income.<br /><br />As a certified optician, I demo sunwear at fishing tournaments throughout the summer. Although I obtain some sponsorship from manufactures, a majority of the expense to and from events is imposed on my business. Therefore we deduct fuel expense for the tow vehicle, hotels, meals, and tournament entry fees. We are also able to depreciate 50% of the boats purchase price since it is used for business promotional purposes half the time and personal recreation the other half.<br /><br /> http://www.myfishingpictures.com/img/049968.jpg <br /><br />I believe it was Paul Harvey that said:<br />If you enjoy your job........You won't have to work for the rest of your life! <br /><br />I love my my job

 

[walleyehed]

Re: Deduct boat purchase from taxes!

Toilet: I'm a man; the world is my toilet.<br />

Why do women not understand this......????

 

[rwidman]

Re: Deduct boat purchase from taxes!

Be sure you check with a qualified tax expert before you make any plans to deduct boatine expenses either as a second home or as a business. The IRS does not like to play games.

 

[Realgun]

Re: Deduct boat purchase from taxes!

Why do women not understand this......????<br />

Because they have to squat to pee and not get any on them we just point and shoot. <br />On a boat we just put it over the side whereas they have to either use something or get to shore. <br />Let the IRS have the money and you lose the power.<br />To bad I paid very little tax.